Mar 25, 2025

over the past two weeks after consistent declines since the start of the year. HousingWire‘s Mortgage Rates Center showed that 30-year conforming loan rates averaged 6.80% on Tuesday, up 1 basis point in the past week , while 15-year conforming rates increased by 9 basis points and averaged 6.67%. Although the Federal Reserve has ended a brief cycle of rate cuts, the consistency shown by monetary policymakers is likely making it easier to price loan offerings. Last week, the Fed kept benchmark rates unchanged at a range of 4.25% to 4.5%. The Federal Open Market Committee (FOMC) won’t meet again until May 6-7, but interest rate traders remain firm that the policy rate isn’t changing then either. According to the CME Group‘s FedWatch tool , nearly 90% of traders believe that rates will stay in the same in May. Looking further into the future, however, 62% say the the FOMC will cut rates by 25 basis points in June. Uncertainty is swirling around the U.S. economy in the form of President Donald Trump’s reciprocal tariffs, which are reportedly being scaled back to the 15 countries with the largest trade deficits with America. Tariffs are one factor that prompted UCLA forecasters  to issue a “recession watch” last week. The majority of Fed policymakers still estimate two rate cuts in 2025, according to their newest Summary of Economic Projections. And Fed Chair Jerome Powell seems unruffled by any dark clouds on the horizon. “There’s always an unconditional probability, possibility, of a recession. It might be broadly in the range of one in four at any time, if you look back through the years. It has moved up, but it’s not high,” Powell told reporters on March 19. The recent stability in mortgage rates is being accompanied by positive signs for home sales. Altos data showed there are 69,000 pending sales of single-family homes this week, up 2.3% from the same week last year for the first annualized gain of 2025. “Home sales aren’t strong, of course,” Altos President Mike Simonsen wrote Monday. “But mortgage rates are now below where they were last year at this time. Rates have been generally sliding slower, while last year at this time, rates were rushing to their highest point of the year. “So, it is in fact fractionally more  affordable  to buy a home right now than last year at this time. Home prices  have not really appreciated any over the past year in most of the country. In many markets, home prices are lower than where they were a year ago, so I imagine some buyers are finding opportunity where they have felt thwarted for many years.” But affordability is fragile and could be damaged if more demand results in higher home prices. The S&P CoreLogic Case-Shiller  Home Price Index , released Tuesday, showed that prices rose 4.1% for the year ending in January, up slightly from 3.9% annualized gain in December. Some major cities — including New York, Chicago, Boston and Cleveland — posted increases of 6% or higher. A report released last week by HomeLight included a survey of loan officers across the country. Nearly three-quarters reported that borrowers are willing to take more risks in their homebuying journey, including the purchase of a fixer-upper, the use of alternative financing and the willingness to accept higher mortgage rates. “Rates aren’t coming down as quickly as originally thought; people are overextending themselves in the hope rates will drop soon, using features like temporary buydowns but not being able to truly afford the full note rate payment,” Alex Peters, a California-based loan officer for Bluefire Mortgage Group, said in the report. Buyers who stretch their budgets too thin pose higher risk for mortgage delinquencies and foreclosures . And loan programs for low- and moderate-income borrowers are usually the first ones to show signs of stress. Intercontinental Exchange (ICE) reported last week that the national delinquency rate rose to 3.53% of all loans in February, up 5.7% from the same month last year. Federal Housing Administration loans accounted for 90% of the new delinquencies in the past year, even though they represent only 15% of active mortgages. Foreclosure starts were up 34.5% from a year ago, ICE reported. Related